The politics of the debt ceiling crisis: Tea Party says no to Boehner, Republicans snatch defeat from the jaws of victory

By Michael J.W. Stickings

Things were looking good for Republicans. More or less. They might not have been able to turn the tables on Obama and the Democrats, which was the plan, but by continuing to hold the country (and, more specifically, the Democrats) hostage on the debt ceiling, they were testing the Democrats' resolve -- and it didn't look like they had much resolve left.

A two-step plan. That's what the Republicans were proposing -- not because it's a good idea but because it's pretty much the only way for them to keep the party from fragmenting, the only way to win the issue politically. Show a bit of seriousness, maybe win back public support, give both the GOP's financial establishment and the Tea Party something to like, hope Obama and the Democrats take the blame. Simple enough.

And, indeed, it was looking like Republicans were poised for a huge win:

John Boehner is proposing a deal with about $1 trillion in spending cuts and a short-term increase in the debt ceiling and a bipartisan congressional committee charged with developing a large deficit reduction package that would be immune to amendments and filibusters and would be the price of the next increase in the debt ceiling. Harry Reid is developing a package of spending cuts that Democrats could accept and would reach Boehner's $2.4 trillion mark.

If you take the Republicans' goals as avoiding a deal in which they have to vote for tax increases and denying Obama a political victory, it looks like they have succeeded. That success has come with costs -- they've done themselves political damage, are risking a crisis that could do the economy tremendous harm, and have left the Bush tax cuts unresolved, which means they might end up watching taxes rise much higher than if they'd taken Obama's offer -- but it's still been a success. 

Basically, Boehner would get a short-term debt increase, appeasing the GOP's corporate-finance base, as well as spending cuts not offset by any revenue increases. Obama would have gotten his increase, but not a political win. And the issue, and the crisis, would have been largely put on hold until 2012, with Republicans dishonestly hammering Obama for supposedly not being serious enough about making a deal. Yes, the costs could turn out to be enormous for the Republicans, but they probably hope they could win the spin.

But no.

Aside from the fact that Boehner is almost certainly wrong about this -- the public is against the GOP on the debt ceiling and Obama has proven successful at using the bully pulpit to shift public opinon -- opposition to his plan has come not so much from the Democrats, who oppose a short-term increase but who might have given in, but from his own party:

The chairman of the conservative Republican Study Committee wasted little time announcing his opposition to the House GOP leadership's two-step plan to raise the debt ceiling.

Rep. Jim Jordan (R-Ohio), who stood — visibly uncomfortable — next to House Speaker John Boehner (R-Ohio) during Monday's announcement of the plan, released a statement saying he would vote "no" on the measure.

As well as from the Tea Party:

A coalition of Tea Party chapters and conservative lawmakers on Monday rejected the debt proposal put forward by Speaker John Boehner (R-Ohio), despite his efforts to sweeten the deal with provisions favored by his conservative base.

The Cut, Cap, Balance Coalition, which boasts hundreds of Tea Party groups and more than 100 GOP lawmakers in its membership, is citing two provisions in Boehner's proposal that amount to deal-breakers: its call for creating a Congressional Commission and its inclusion of a balanced budget amendment that, according to the group, is only for show.

Yes, even when faced with an historic victory, Republicans don't think it's quite good enough, demanding more and more and refusing to give up their ideological absolutism for anything smelling of compromise -- even a pro-GOP compromise with an almost full-scale Democratic sellout.

So why is anyone even listening to Boehner anymore? He clearly doesn't control his caucus and can't even come up with a viable plan. Maybe that's not his fault. He's dealing with extremists, after all, and with them refusing to budge, there isn't really much he can do. Forget the policy, he can't even win the politics, which means the Republicans won't win the spin.

On the other side, Harry Reid actually does have a plan, one Obama seems to like. It's hardly an ideal plan from a progressive perspective, a $2.7 trillion debt ceiling increase with $2.7 million in spending cuts (mostly from ending the wars in Iraq and Afghanistan), but it's got some potential:

[W]hile Reid's plan doesn't raise taxes, it also doesn't take tax increases off the table. Currently, the Bush tax cuts are scheduled to expire in 2012. If Reid's all-cuts plan passes, that still leaves the door open to significant revenue increases. Now that doesn't mean this is brilliant 11-dimensional chess. The Reid Plan is consistent with substantial revenues coming online in 2012, but that will only happen if President Obama and Senate Democrats stand firm and play hardball on the tax issue. Back in December 2010, they utterly failed to do so. 

True, it's hard to have much confidence in Obama and the Democrats. But this could be a way for them to "win" the issue politically, as it shows once more that they're serious about getting something done, even if nothing actually gets done, while the Republicans continue to splinter and look desperate and pethetic, and ever more extremist.

But... enough.

We're spending so much time on the politics of the debt ceiling crisis. What about actually raising it? Is that going to happen? If so, how?

Economic catastrophe is at hand. Isn't preventing that from happening a more pressing priority than scoring the most political points?

Maybe Jonathan Chait is right and Obama, in his speech last night, was "positioning himself for failure." And maybe there's just no avoiding it now.

If so, if there is failure, then it is American democracy that has failed. And if it has, it is the Republicans who are to blame, for they have embraced right-wing radicalism, descended into madness, and pulled the country into the abyss.

I used to think America was better than that. I was wrong. And now, I am at a loss. What is there left to do?

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The politics of the debt ceiling crisis: How it's still Obama's issue to lose

By Michael J.W. Stickings

The debt ceiling crisis has become more about politics than policy. Actually, it's become a game of chicken -- all thanks to the Republicans. The only question is, which side will swerve out of the way first.

Well, sort of.

President Obama and the Democrats have proven again and again that they're serious about averting imminent economic catastrophe by reaching across the aisle in search of compromise. To that end, they've been willing to give up a lot. The same has obviously not been true of Republicans.

Indeed, while Republicans refuse to budge on taxes, on sufficient revenue increases to make getting America's fiscal house in order possible, the president -- the adult in the room -- has indicated that he's willing to agree to massive spending cuts, including to Social Security and Medicare, much to the frustration (to put it mildly) of progressives and much of the Democratic base.

On the policy, in my view, Obama has been less than admirable. On the politics, though, he has been typically awesome, successfully turning the tables on the Republicans and backing them into a corner. Polls show that the American people blame the Republicans far more than they do the president for the debt ceiling fiasco, and I suspect Obama has been willing to give up so much largely because he has realized all along that he'd never actually be able to get a deal done. In this sense, he has successfully positioned himself as the sort of centrist, the sort of serious deficit-fighter, independents, not to mention the Beltway media, like (and want to vote for). Meanwhile, the Republicans look like a gang of extremists wielding unreasonable demands and petulantly threatening to pull the country into the abyss if they don't get their unreasonable way.

This is all happening quickly, but what's clear is that the Republicans have gotten desperate, hurling smears at Obama that bear no resemblance to reality whatsoever. He a tax-happy socialist, they scream. Well, no, he's willing to agree to a deal that would slash trillions in spending with only minimal revenue increases. He's not at all serious about cutting spending, they shriek. Wrong again. Look at what he's been proposing. The facts are clear.

Ultimately, Obama will find some way to increase the debt ceiling. He has to. And the Republicans know it, not least because their corporate, Wall Street backers are demanding that it be done, just as it's always been done. But that doesn't mean they won't try to win the issue politically, and that's what's going on now. They're trying to turn the tables back on Obama, trying to back him into a corner, trying to make him take the fall if a deal doesn't get done.

Speaker Boehner is now saying he wants a deal done by today. Okay, but where's he been all along? Clearly, this is posturing. And it would appear that what he wants is a two-stage deal:

House Speaker John Boehner (R-Ohio) is set to call the Democratic Party's bluff on the debt ceiling. The Ohio Republican, in a briefing with his conference on Saturday, announced that he would press for a short-term deal, with major spending cuts paired with longer-term deficit-reduction strategies, as a way around the current impasse.

That strategy puts the speaker directly at odds with the White House and allied Democrats, who have insisted for weeks that they would not support a short-term extension of the debt ceiling. The president went so far as to dare House Majority Leader Eric Cantor (R-Va.) to test his opposition to a temporary deal during a tense meeting more than a week ago.

Whether that rigidity will fade as the Aug. 2 deadline to raise the debt ceiling nears is a big gamble on Boehner's part. 

This after talks collapsed yesterday.

Now, it's possible that, faced with that deadline (and with the possibility of economic catastrophe), Obama and the Democrats will cave. But thus far they've been firm in their staunch opposition to a short-term deal. As Senate Majority Leader Harry Reid clarified yesterday:

I want to reaffirm my statement from last night. I will not support any short-term agreement, and neither will President Obama nor Leader Pelosi. We seek an extension of the debt ceiling through at least the end of 2012. We will not send a message of uncertainty to the world.

The Republicans are obviously hoping they can pin the blame on Obama and the Democrats for the collective failure to get something done. Whether or not they sign on to Boehner's plan, Republicans can and will accuse them of being the real obstacles to a more substantive deal. In other words, they hope they can win the spin. It may be entirely dishonest, but you know they'll do it. Because it's pretty much all they've got left.

In my view, Obama and the Democrats need to stand firm. If Boehner is calling Obama's bluff, then Obama needs to call Boehner's. The president has public opinion on his side and can go with the constitutional option to raise the debt ceiling. And, of course, he has the bully pulpit, not to mention his own phenomenal political skills, and can make his case far better than the Republicans can theirs. (And, what's more, Republicans are still deeply divided on the issue, with the Tea Party right opposed to compromise and the establishment, with the party's financial backers behind it, understanding that a debt ceiling increase is absolutely necessary. The president should exploit this division as much as possible.)

In other words, don't let the Republicans define the issue and get their way. It's as simple as that. I'm not sure I have all that much confidence that Obama and the Democrats will actually stand their ground, but they'd be crazy not to take advantage of their current position and keep up the pressure on the Republicans. The issue, politically speaking, is theirs to lose.